We Buy Houses For Cash
You see it advertised all of the time. “We buy houses for cash.” Whether through yard signs, billboards, bandit signs or online, it is commonplace to see this type of claim. The fact is many investors make a habit out of paying cash for every property that they purchase. The thing that may be running through your mind though (aside from the dollar $$$ signs) is wondering if it may be a scam and too good to be true if you get a cash offer for your home.
How to know if your Cash Buyer is the Real Deal
One report from the National Association of Realtors showed that over 10 percent of residential properties that were bought outright were done so by international buyers and/or investors. But, it’s not just these types of buyers that are in the market as move-up buyers and buyers of second homes are also entering the market with all-cash as well.
The typical cash buyer is a real estate investor who is market savvy. They may be purchasing it with their own cash, potentially from a hard money lender or a private money source. Looking to expand their real estate portfolio, real estate investors can tap into their network to get a transaction financed. If the property is a foreclosure or short sale. then an investor may be the best fit to buy this type of property because of their extensive knowledge and financial purchasing power.
In markets across the country, we have seen first-time buyers competing with investors and the overall number of cash deals are up. Investors buying with cash typically plan to either flip or rent out the property.
Advantages of a Cash Buyer
A cash buyer typically means a fast sale. Which equates to the deal being closed in a matter of days or several weeks instead of months as with normal bank financed transactions. Is there a catch? Not usually. Although it may sound too good to be true with no contingencies on the offer, a cash buyer usually is as serious as they come. You should ensure that they have the cash so make sure that you get proof of the funds. This can be done through a bank statement or a proof of funds letter through the buyer’s financial institution. With a cash offer, there is no need for a lender approval which means fewer obstacles to get in the way of getting the property sold and the deal not falling apart due to the buyer’s financing contingency.
Below are a few notes about selling a property for cash:
• A cash buyer can gain immediate equity in the property.
• Some sellers reduce the asking price for cash buyers because of a quick closing and less carrying costs involved.
• Closing costs are usually lower when properties are purchased with cash.
The Bottom Line
An all-cash offer can be very appealing as financing approval, home inspections, appraisals and other contingencies are typically not part of a cash offer. Once a cash offer is accepted, then the timetable to closing can go quite quickly. This offers convenience for the seller since the buyer is accepting the condition of the home as-is. In today’s real estate market, purchasing a home with cash does have its advantages.
With tighter lending restrictions in place, a qualified buyer with cash should make any seller happy!
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